Take a Test- Awais Mahmood-Google Chrome Secure 18/PS-MAT-123-C1 Statistics Awai

Question

Take a Test- Awais Mahmood-Google Chrome Secure 18/PS-MAT-123-C1 Statistics Awais Mahmood6/8/18 11:41 AM Test: Chapter 5 Post-Test (Callahan) Submit Test This Question: 1 pt This Test: 10 pts possible There is a 09989 probability that a randomly selected 33-year-old male lives through the year A life insurance company charges $174 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $100,000 as a death benefit. Complete parts (a) through (c) below a. From the perspective of the 33-year-old male, what are the monetary values corresponding to the two events of surving the year and not surviving? The value corresponding to surviving the year is s The value (Type integers or decimals Do not round) ng to not surviving the year is s b. If the 33-year-old male purchases the policy, what is his expected value? The expected value is $ (Round to the nearest cent as needed ) c. Can the insurance company expect to make a profit from many such policies? Why? y because the insurance company expects to make an average profit of $on every 33-year-old male it insures for 1 year (Round to the nearest cent as needed )

Explanation / Answer

a)

the value corresponding to surviving the year =-174

the value corresponding to not surviving the year =100000-174=99826

b)

expected value =-174*0.9989+99826*0.0011=-64

c)

Yes because........profit of $64 on every...........

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.